1. Increase in research credit and better access to credit for startups
Credit rate increase—
In general— Section 41(a) of the Internal Revenue Code of 1986 is amended by striking “20 percent” and inserting “40 percent”.
Alternative simplified credit— Section 41(c)(4)(A) of such Code is amended by striking “14 percent” and inserting “28 percent”.
Credit rate in case of no research expenses in 3 preceding years— Section 41(c)(4)(B)(ii) of such Code is amended by striking “6 percent” and inserting “1/2 the credit percentage in effect under subparagraph (A)”.
Modification of small business portion allowed against payroll tax—
Increase in limitation— Paragraphs (4)(B)(i) and (5)(B)(ii) of section 41(h) of such Code are each amended by striking “$250,000” and inserting “$500,000”.
Qualified small business gross receipts threshold— Section 41(h)(3)(A)(i)(I) of such Code is amended by striking “$5,000,000” and inserting “the dollar amount in effect for the taxable year under section 448(c)(1)”.
Effective dates—
Subsection (a)— The amendments made by subsection (a) shall apply to taxable years beginning after December 31, 2020.
Subsection (b)— The amendments made by subsection (b) shall apply to taxable years beginning after December 31, 2019.